Why the Pushpay Holdings Share Price Is Up Over 18% Today

 

Pushpay Holdings [NZX:PPH] released a very positive set of annual results this morning. Pushing up their share price over 18%. And contributing to a remarkable recovery from lows of around $2.56 in mid-March to over $5.30 today.

Pushpay is an online donor-management system working with nearly 8,000 churches in the US, Canada, Australia, and New Zealand. Plus other non-profit organisations. With attendances restricted due to coronavirus, there were some impact fears.

In fact, anecdotal evidence seems to suggest more people are attending virtual church services online. In the UK, it was reported that 1 in 4 people are attending services since the coronavirus lockdown began.

 

Why has the [NZX:PPH] share price risen?

 

The NZX was already enjoying positive risk sentiment today, with oil prices back up over US$30 per barrel of crude. Pushpay also has an exemplary track record in meeting guidance targets. Since initially listing in August 2014, the company has met or exceeded all guidance provided to the market.

Here are the key highlights from the annual results for the year ended 31 March 2019:

  • Increased total revenue by US$28.2 million from US$70.2 million to US$98.4 million, an increase of 40%.
  • Increased gross margin from 55% to 60%.
  • Increased EBITDAF by US$20.2 million from a loss of US$18.6 million to a gain of US$1.6 million, an increase of 108%.
  • Pushpay expects continued strong revenue growth, as they continue to execute on a strategy to gain further market share.
  • Pushpay is also evaluating acquisitions that broaden the current proposition and add value.
  • Pushpay is providing the following guidance for the year ending 31 March 2020:
    • Operating revenue of between US$122.5 million and US$125.5 million (circa 25% increase)
    • EBITDAF of between US$17.5 million and US$19.5 million (circa 1200% increase)
    • Gross margin of above 63%

So, the share price rise is not surprising, given that Pushpay is now in positive earnings. And expects to grow this out much further over the next financial year.

 

Where could [NZX:PPH] go from here?

 

The company, over the long-term is targeting over 50% of the medium and large church segments. This opportunity represents over US$1 billion in annual revenue.

We don’t yet know the impact of coronavirus on Pushpay, yet it appears on this guidance management is unconcerned. The business trades at a P/E of around 30 and does not currently pay any dividend. So future and rapid growth is clearly being priced in today.

Pushpay presents an interesting tech investment in this climate. These results are exciting. Indeed, the future may include tailwinds of an increasing turn to faith, especially in key markets like the US.

 

Regards,

Simon Angelo

Editor, WealthMorning.com

PS: Have a question on the markets? Subscribe to our free newsletter and access our Wealth Talk podcast where we take general questions every Friday.

 

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Simon is the Chief Executive Officer and Publisher at Wealth Morning. He has been investing in the markets since he was 17. He recently spent a couple of years working in the hedge-fund industry in Europe. Before this, he owned an award-winning professional-services business and online-learning company in Auckland for 20 years. He has completed the Certificate in Discretionary Investment Management from the Personal Finance Society (UK), has written a bestselling book, and manages global share portfolios. Simon is a shareholder of Wealth Morning.


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